Financial Services

CFTC Penalizes Registrant for Outsourced IT Security Lapses Last month, the CFTC settled charges against an organization for its failure to ensure the security of its’ customers’ records and information. The registrant’s third-party vendor gained unauthorized access to more than 90,000 records, and the CFTC’s charges make clear the risks registrants can face when their third parties are derelict in...

Easing the Burden for Financial Services Firms Financial services firms that are headquartered or do business with customers in the European Union (EU) have been subject to the Markets in Financial Instruments Directive (MiFID) since its enactment in 2007. But now there is a new wrinkle — an enhanced version of this cornerstone of capital markets regulation. This wrinkle is...

Suitability Surveillance and Controls Despite how many risk and compliance eyes an investment bank has inspecting client activity, when it comes to managing risk, it's impossible to review each and every investment recommendation or transaction by a simple eyeballing of trade records. And understanding any recommendation or transaction in the context of a client’s investment profile is both a critical...

Where Firms Should Concentrate Compliance Efforts In the past few months, both the SEC and FINRA issued guidance concerning their regulatory priorities for the coming year. Both of the agency’s annual priorities letters address a large number of diverse topics. Experts from Baker Donelson discuss where the SEC's and FINRA's concerns overlap, what they have indicated their areas of focus and...

Priorities Letter Outlines Areas of Focus Each year, the Financial Industry Regulatory Authority (FINRA) shares its regulatory and examination priorities for the coming year, highlighting both new and continuing areas of focus. In this post, experts from Venable LLP provide an overview of the most significant areas addressed in the 2018 letter. with co-authors D. E. (Ed) Wilson, Jr., Andrew...

Why "Minimal Viable Compliance" Can’t Be the Goal Major regulatory deadlines often lead firms to settle for minimum viable compliance – taking whatever action is needed to avoid regulatory scrutiny, regardless of the cost. But this approach inevitably leads to an inefficient, patchwork approach to compliance, where new procedures are created for each new regulation. As firms move past the...

Key Concerns for Private Funds in 2018 with co-authors Joshua M. Newville, Michael R. Hackett, Anthony Drenzek, William Dalsen, Alexandra V. Bargoot, Brian Hooven and Lucy Wolf With the public equity markets at an all-time high and private equity fundraising setting new records, it might seem counterintuitive to forecast litigation and regulatory risks. The opposite is true. Disputes typically follow capital, and the steeper the growth curve, the...

QDD (or Qualified Derivatives Dealers) is the latest set of requirements for broker-dealers and banks to apply for if they’d like to avoid the barrage of withholding taxes that have been set forth by the IRS – including the hotly debated 871(m), which sets a transaction tax on equity-linked derivatives with underlying assets as American instruments. And while QDD may...

Business needs in the 21st century are far more complex than just one general policy will cover. We live in a “sue crazy” culture and the reality is there are just as many people looking to nail it to the corporation as there are happy consumers eager for your product. We hope this guide helps.

A new revenue recognition standard set for implementation in December, ASC 606, is set to shake up the asset management industry.

What Money Laundering Looks Like in Community Banks Although they generally have smaller compliance teams and budgets, the nation’s community banks face the same arduous compliance challenges as their larger bank counterparts. Artificial intelligence and machine learning solutions can greatly assist community banks by detecting suspicious entities and transactions in an effort to improve regulatory compliance and AML investigation efficiency....

A Much-Needed Intelligent Approach to Segmentation Anti-money laundering (AML) is a complex and persistent challenge for financial institutions. AI is transforming key elements of the AML workflow and delivering an order of magnitude in performance improvements in the process. Money laundering has become the leading source of compliance fines for North American and European institutions. In 2016 alone, regulators levied...